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Well Fargo & Co. (NYSE: WFC) stock fell 0.83% Monday, the last trading session before Q4 earnings are released Tuesday before the bell.
We get a fresh read on health of the housing and mortgage markets when Wells Fargo Q4 earnings come out.
Analysts are expecting the San Francisco-based lender to book its 16th consecutive quarter of profit growth. Earnings are projected to have risen 8% year over year.
But, the numbers ought to come with an asterisk.
You see, while the financial bellwether is expected to handily beat earnings estimates, it's likely to have done so more by cost-cutting than earning more money.
It's expected that mortgage refinancing activity fell at the bank, hurting Q4 earnings. Mortgage rates have risen since the first mumblings of a Fed taper.
That means WFC would have to trim expenses and release reserves in order to look more profitable.
Estimates are for net income of $5.29 billion, or $0.99 a share, compared with $4.66 billion, or $0.91 a share, in a same period a year ago. Excluding one-time items, earnings per share is forecast to come in a $0.98 a share, up from $0.92 a share a year ago.
But forecasts have revenue falling 11% year over year to $20.68 billion, down from $23.16 billion a year earlier.
For the full fiscal year, analysts are looking for earnings of $3.87 per share, with revenue at $84.17 billion.
Wells Fargo has posted a net income increase in the last three consecutive quarters. In Q3, profits rose 10% year over year. Net income rose 19% in Q2 and 22% in Q1.
However, revenue has slipped for three straight quarters. Revenue declined 7% to $21.51 billion in Q3. It dipped 1% in Q2 and slumped 3% in Q1, all on a year-over-year basis.
WFC Earnings: Getting Creative
Banks are getting creative in tactics to attract customers and spur growth, as borrowing demand is down and regulations are up.
Wells Fargo, boasting a more polished reputation than many of its peers, is no exception...